23-76-119. Prohibited practices — Definition.

23-76-119. Prohibited practices — Definition. (a) No health maintenance organization, or representative thereof, may knowingly cause or knowingly permit the use of advertising that is untrue or misleading, solicitation that is untrue or misleading, or any form of evidence of coverage that is deceptive. For purposes of this chapter: (1) A statement or item of information shall be deemed to be untrue if it does not conform to fact in any respect that is or may be significant to an enrollee of, or person considering enrollment in, a healthcare plan; (2) A statement or item of information shall be deemed to be misleading, whether or not it may be literally untrue, if, in the total context in which the statement is made or the item of information is communicated, the statement or item of information may be reasonably understood by a reasonable person, not possessing special knowledge regarding healthcare coverage, as indicating any benefit or advantage or the absence of any exclusion, limitation, or disadvantage of possible significance to an enrollee of, or person considering enrollment in, a healthcare plan, if the benefit or advantage or absence of limitation, exclusion, or disadvantage does not in fact exist; and (3) An evidence of coverage shall be deemed to be deceptive if the evidence of coverage taken as a whole, and with consideration given to typography and format, as well as language, shall be such as to cause a reasonable person, not possessing special knowledge regarding healthcare plans and evidences of coverage therefor, to expect benefits, services, charges, or other advantages that the evidence of coverage does not provide or that the healthcare plan issuing the evidence of coverage does not regularly make available for enrollees covered under such evidence of coverage. (b) An enrollee may not be cancelled or nonrenewed except for the failure to pay the charge for the coverage or for such other reasons as may be promulgated by the Insurance Commissioner. (c)Hold Harmless. (1) Every contract between a health maintenance organization and a participating provider of healthcare services shall be in writing and shall set forth that in the event the health maintenance organization fails to pay for healthcare services as set forth in the contract, the subscriber or enrollee shall not be liable to the provider for any sums owed by the health maintenance organization. (2) In the event that the participating provider contract has not been reduced to writing as required by this subsection or that the contract fails to contain the required prohibition, the participating provider shall not collect or attempt to collect from the subscriber or enrollee sums owed by the health maintenance organization. (3)(A) No participating provider or the provider's agent, trustee, or assignee may maintain an action at law against a subscriber or enrollee to collect sums owed to them by the health maintenance organization nor shall they make any statement, either written or oral, to any subscriber or enrollee that makes demand for, or would lead a reasonable person to believe that a demand is being made for, payment of any amounts owed by the health maintenance organization. (B)(i) If a participating provider has a pattern or practice of violating this subsection and continues to violate this subsection after the commissioner has issued a written warning to the participating provider, the commissioner may levy a penalty in an amount not less than one hundred fifty dollars ($150) nor more than one thousand five hundred dollars ($1,500). (ii) Before imposing the penalty, the commissioner shall send a written notice to the participating provider informing the provider of the right to a hearing pursuant to §§ 23-61-303 — 23-61-307. (4) “Participating provider” means a “provider” as defined in § 23-76-102(10) who, under an express or implied contract with the health maintenance organization or with its contractor or subcontractor, has agreed to provide healthcare services to enrollees with an expectation of receiving payment, other than copayment or deductible, directly or indirectly, from the health maintenance organization. (d)(1) A health maintenance organization or its contractor or subcontractor may pay a claim for healthcare services by any lawful method, including the alternative payment method by gift card, credit card, or other type of electronic payment or virtual credit card as payment if the healthcare provider is given clear instructions about how to select the alternative payment method. (2) However, a health maintenance organization or its contractor or subcontractor is prohibited from requiring a participating provider to accept a gift card, credit card, or other type of electronic payment or virtual credit card as payment of a claim for healthcare services if the method of payment charges the participating provider a service fee to process.